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Revision Charts – CA Inter

Allotment of Securities

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Allotment of securities by company
(section 39)
1. The amount stated in the
prospectus as the minimum
amount has been subscribed and
the sums payable on application
for the amount so stated have
been paid to and received by the
company by cheque or other
instrument.
2. The amount payable on
application shall not be less than
5%b of the nominal amount of
the security
3. Minimum subscription and sum
payable on application must be
received within thirty days from
the date of issue of the prospectus,
4. If min subscription not received
company shall refund the money
within 15 days.
5. If money not refunded within 25
days interest @15%
6. File with the Registrar a return
of allotment.
7. In case of any default the
company and its officer who is in
default shall be liable to a penalty,
Allotment of securities
Securities to dealt with at the stock
exchange (section 40)
1. Application to one or more
recognised stock exchange or
exchanges for listing of its
securities.
2. prospectus shall state the name
or names of the stock exchange
3. All monies received shall be kept
in a separate bank account in a
scheduled bank and shall be used
only for
a) for adjustment against
allotment of securities; or
b) for the repayment of
monies.
4. If a default is made in complying
with the provisions of this section
 Company shall be liable to
a fine which shall not be
less than 5 lakhs but may
extend upto 50 lakhs
 every Officer of the
company shall be
punishable with
imprisonment upto one
year, or with fine not less
than 50 thousand rupees but
Underwriting commission (section 40)
Company may pay commission.
As per Rule 13 of the Companies
(Prospectus andAllotment of
Securities) Rules, 2014.
1. the payment authorized in the
company’s articles of
association;
2. paid out of proceeds of the issue
or the profit of the company or
both;
3. The rate of commission shall not
exceed
a) in case of shares
 5% of the price at
which the shares are
issued; or
 the rate authorised
by the articles
whichever is less
b) in case of debentures
 2.5% of the price at
which the
debentures are
issued; or
 the rate authorised
by the articles
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for each default, of 1000 for each
day during which such default
continues or 1lakh rupees,
whichever is less.
which may extend to 3 lakh whichever is less
rupees, or with both. 4. The prospectus shall disclose
a) the name of the
underwriters;
b) the rate and amount of the
commission payable; and
c) the number of securities to
be underwritten.
5. Commission shall not be paid on
securities which are not offered
to the public for subscription.
6. A copy of the contract shall be
delivered to the Registrar with
the prospectus.
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